The US Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment of up to $1.2 billion for a direct loan to ENTEK Lithium Separators LLC (ENTEK).

If finalized, the loan will substantially finance a new facility in Terre Haute, Indiana to manufacture lithium-ion battery separators. The separators will be used primarily in electric vehicles (EVs)—strengthening the U.S. lithium-ion battery cells supply chain and enabling the creation of batteries used in advanced technology vehicles.

A battery separator is a membrane sandwiched between the anode and cathode of a battery. The principal functions of the battery separator are to prevent electronic conduction (i.e., shorts or direct contact) between the anode and cathode while permitting ionic conduction via the electrolyte. Separators play an essential role in the performance and safety of lithium-ion batteries.

DOE estimates that by 2030, the North American lithium-ion EV battery industry will require annual separator production of 7 to 10 billion square meters. Once complete, the ENTEK facility is expected to have the capacity to manufacture 1.72 billion square meters of separator material annually for the North American EV market.

Based on the LPO technical team’s analysis, the number of EVs supported by this project depends upon the battery form factor (cylindrical, pouch, or prismatic) used for various battery chemistries. Each GWh of cell manufacturing requires 7-10 million square meters of battery separator depending on the battery form factor. Based on current form factors chosen by cell manufacturers, the project will support roughly 1.9 million mid-size EVs or 1.3 million eSUVs.

ENTEK will be able to customize battery separators to accommodate numerous EV battery designs. The separators produced will be able to accommodate all existing lithium-ion EV battery chemistries, including NMC, NCA, LMFP, and LFP. Additionally, ENTEK will be able to sell its separators to manufacturers of lithium-ion batteries for energy storage applications.

If finalized, the loan would be offered through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which provides loans to support US manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy.

While this conditional commitment indicates DOE’s intent to finance the project, DOE and the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan.